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High Yield Perpetual Bonds
By Century Financial in Investment Insights
*Trading in financial market carries risk and can result in loss of capital.
*This performance is only observed with historical backtests and not traded by the company.
The product and investment ideas do not consider the risk profile and financial position of the
recipient and may not be suitable for everyone. Trading in financial markets and use of margin
involves a significant risk of loss, which can exceed deposits. Please read the complete disclaimer
carefully.
The Fed fund rates are expected to peak at 5.25%, meaning that the current high yield won’t be
available for long. Yields tend to fall ahead of the Fed Pivot as market participants place bets ahead
of the actual event, hence now is a suitable to capitalize on the opportunity. Below are 3
recommendations for perpetual bonds, which are a good fit for investors seeking stable coupon
income and high yields.
Issuer
Name
Ask
Price
($)
Yield to
Maturity
(Mid) %
Coupon
(%)
LQA
Score
Maturity
Type
Next Call
Date
Floater
Spread
(bps)
S&P/
Moody's/
Fitch Rating
Coupon
Reset Date
Benchmark
for pricing
Bank of
New York
Mellon
Corp/The
97.50 7.92 4.70 76 PERP/CALL 20/09/2025 435.8 BBB/Baa1/BBB+ 20/09/2025
US
Treasury 5
Yr Maturity
T Note
Rates
JPMorgan
Chase &
Co
90.69 7.81 4.00 50 PERP/CALL 01/04/2025 274.5
BBB-
/Baa2/BBB+
01/04/2025
ICE Term
SOFR Ref
Rates 3M
Citigroup
Inc
95.55 8.41 5.00 65 PERP/CALL 12/09/2024 381.3 BB+/Ba1/BBB- 9/12/2024
ICE Term
SOFR Ref
Rates 3M
Note: Bonds have semi-annual coupon frequency
Data Source: Bloomberg
Date: 17/02/2023
Trading Details
Issuer Name ISIN Ticker CUSIP
Min.
Investment
Amount
Initial Margin
for $100,000
investment
Bank of New York Mellon
Corp/The
US064058AH32 BK IBCID421740767 $1,000 $31,030
JPMorgan Chase & Co US48128BAH42 JPM IBCID404538033 $1,000 $29,050
Citigroup Inc US172967MG30 C IBCID382324374 $1,000 $36,822
*Initial Margin as per Interactive Brokers
Credit and Liquidity Assessment
Bank of New York Mellon JP Morgan Chase & Co Citigroup Inc
Credit Assessment
Credit
Metric
BK
10
Pctl
90
Pctl
Credit
Metric
JPM
10
Pctl
90
Pctl
Credit
Metric
C
10
Pctl
90
Pctl
Market
Cap/Liab
(%)
0.1 0.1 7.6
Return
on
Assets
(%)
1 0.7 1.6
Return
on
Assets
(%)
0.6 0.7 1.6
Return
on
Assets
(%)
0.6 -0.1 16.1
Debt/Eq
uity (%)
233.3 13.1
163.
7
Debt/Eq
uity (%)
377 13.1 163.7
Assets/Li
ab (%)
1.1 1 3.7
LLR/NPL
(%)
293.5 122
1379
.4
LLR/NPL
(%)
13.1 122
1379.
4
Debt/Ass
et (%)
17.7 0.6 77.5
Tier 1
Capital
Ratio (%)
14.8 10.2 17.2
Tier 1
Capital
Ratio (%)
14 10.2 17.2
Debt/Eq
uity (%)
176.3 1.7 644.8
Assets/Li
ab (%)
1.1 1.1 1.2
Assets/Li
ab (%)
1.1 1.1 1.2
Liquidity Assessment
Liquidity
Metric
Scena
rio
1
Baseli
ne
Scena
rio
2
Liquidity
Metric
Scena
rio
1
Baseli
ne
Scen
ari
2
Liquidity
Metric
Scena
rio
1
Baseli
ne
Scena
rio
2
Mid-
Price
(BVAL)
97.42
Mid-
Price
(BVAL)
90.03
Mid-
Price
(BVAL
90.03
Exit Price 97.38 97.39 97.4
Exit
Price
89.93 89.96
89.9
8
Exit
Price
89.96 89.96 89.98
Liquidati
on Cost
(bps)
3.90 2.70 2.00
Liquidati
on Cost
(bps)
10 7.2 5.50
Liquidati
on Cost
(bps)
7.2 7.20 5.5
Liquidati
on
Horizon
(days
0.3 0.2 0.2
Liquidati
on
Horizon
(days
0.4 0.3 0.3 0.3 0.3 0.3 0.30
Time to
Cash
(days)
3 3 3
Time to
Cash
(days)
3 3 3
Time to
Cash
(days)
3 3 3
SEC 22E4
Classifica
tion
Highl
y
Liquid
Highl
y
Liqui
d
Highl
y
Liquid
SEC 22E4
Classifica
tion
Highl
y
Liquid
Highl
y
Liqui
d
Highl
y
Liqui
d
SEC 22E4
Classifica
tion
Highl
y
Liquid
Highl
y
Liqui
d
Highl
y
Liquid
AIFMD
Classifica
tion
2 to 7
days
2 to 7
days
2 to 7
days
AIFMD
Classifica
tion
2 to 7
days
2 to 7
days
2 to
7
days
AIFMD
Classifica
tion
2 to 7
days
2 to 7
days
2 to 7
days
Data Source: Bloomberg
Notes:
Scenario 1 - Assumes expected daily volume of 0.5x of baseline.
Scenario 2 - Assumes expected daily volume of 2.0x of baseline.
The 10th and 90th percentile represent the sector figures.
The liquidity assessment considers an investment of $1 million.
Appendix
Bond Rating Scale:
Source: Moody’s, S&P and Fitch.
Terminologies:
Investment Grade signifies that the bonds relatively have a lower risk of default and receive higher
ratings by the credit rating agencies.
Yield to Maturity: The total return anticipated on a bond if the bond is held until it matures.
LQA: A liquidity estimation. A higher number indicates lower bid-ask spreads.
ISIN: A 12-digit alphanumeric code that uniquely identifies a specific security.
Risks and Assumptions for Back-tested trading strategies
The risks and assumptions listed here are not intended to be an exhaustive summary of all the risks
and assumptions involved.
The strategy might suffer from look-ahead bias which occurs due to the use of information or data in
a study or simulation that would not have been known or available during the period being analyzed.
This can lead to inaccurate results in the study or simulation.
Future price movements may not be exactly the same as the historical price movements and this
could lead to variation in performance.
Testing can sometimes lead to over-optimization. This is a condition where performance results are
tuned so high to the past they are no longer as accurate in the future.
The model assumes no slippages in trading. Slippage refers to the difference between the expected
price of a trade and the price at which the trade is actually executed.
Drawdowns in actual trading can be higher than the tested system and losses could be significant in
the event of leverage.
Unforeseen events can lead to variation in performance from the tested trading strategy.
The tested result has been computed with price feeds available from Bloomberg.
The testing environment has not considered transaction or any other costs.
Trading indicators used for the purpose of testing has been provided by Bloomberg.
The strategy might suffer from data mining fallacy, selection bias and backfill bias.
Data Source: Bloomberg
Data: 17/02/2023
Arun Leslie John
Chief Market Analyst
Disclaimer: Century Financial Consultancy LLC (“CFC”) is Limited Liability Company incorporated
under the Laws of UAE and is duly licensed and regulated by the Emirates Securities and
Commodities Authority of UAE (SCA).This document is a marketing material and is for informational
purposes only and must not be construed to be an advice to invest or otherwise in any investment or
financial product. CFC does not guarantee as to adequacy, accuracy, completeness or reliability of
any information or data contained herein and under no circumstances whatsoever none of such
information or data be construed as an advice or trading strategy or recommendation to deal
(Buy/Sell) in any investment or financial product. CFC is not responsible or liable for any result, gain
or loss, based on this information, in whole or in part. Please carefully read disclaimer mentioned
below/next page/next frame.
PLEASE READ THE FOLLOWING TERMS AND CONDITIONS OF ACCESS FOR THE PUBLICATION BEFORE
THE USE THEREOF.
By use of the publication and continuing to access the publication, you accept these terms and
conditions and undertake to be bound by the acceptance. CFC reserves the right to amend, remove,
or add to the publication and Disclaimer at any time without any prior notice to you. Such
modifications may be effective immediately or otherwise. Accordingly, please continue to review this
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Disclaimer, you may not access, or use the publication. Any terms and conditions proposed by you
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No information as given herein by CFC in this publication should be construed as an offer,
recommendation or solicitation to purchase or dispose of any securities/financial
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High Yield Perpetual Bonds | Century Financial

  • 1. High Yield Perpetual Bonds By Century Financial in Investment Insights *Trading in financial market carries risk and can result in loss of capital. *This performance is only observed with historical backtests and not traded by the company. The product and investment ideas do not consider the risk profile and financial position of the recipient and may not be suitable for everyone. Trading in financial markets and use of margin involves a significant risk of loss, which can exceed deposits. Please read the complete disclaimer carefully. The Fed fund rates are expected to peak at 5.25%, meaning that the current high yield won’t be available for long. Yields tend to fall ahead of the Fed Pivot as market participants place bets ahead of the actual event, hence now is a suitable to capitalize on the opportunity. Below are 3 recommendations for perpetual bonds, which are a good fit for investors seeking stable coupon income and high yields. Issuer Name Ask Price ($) Yield to Maturity (Mid) % Coupon (%) LQA Score Maturity Type Next Call Date Floater Spread (bps) S&P/ Moody's/ Fitch Rating Coupon Reset Date Benchmark for pricing
  • 2. Bank of New York Mellon Corp/The 97.50 7.92 4.70 76 PERP/CALL 20/09/2025 435.8 BBB/Baa1/BBB+ 20/09/2025 US Treasury 5 Yr Maturity T Note Rates JPMorgan Chase & Co 90.69 7.81 4.00 50 PERP/CALL 01/04/2025 274.5 BBB- /Baa2/BBB+ 01/04/2025 ICE Term SOFR Ref Rates 3M Citigroup Inc 95.55 8.41 5.00 65 PERP/CALL 12/09/2024 381.3 BB+/Ba1/BBB- 9/12/2024 ICE Term SOFR Ref Rates 3M Note: Bonds have semi-annual coupon frequency Data Source: Bloomberg Date: 17/02/2023 Trading Details Issuer Name ISIN Ticker CUSIP Min. Investment Amount Initial Margin for $100,000 investment Bank of New York Mellon Corp/The US064058AH32 BK IBCID421740767 $1,000 $31,030 JPMorgan Chase & Co US48128BAH42 JPM IBCID404538033 $1,000 $29,050 Citigroup Inc US172967MG30 C IBCID382324374 $1,000 $36,822 *Initial Margin as per Interactive Brokers Credit and Liquidity Assessment Bank of New York Mellon JP Morgan Chase & Co Citigroup Inc Credit Assessment Credit Metric BK 10 Pctl 90 Pctl Credit Metric JPM 10 Pctl 90 Pctl Credit Metric C 10 Pctl 90 Pctl
  • 3. Market Cap/Liab (%) 0.1 0.1 7.6 Return on Assets (%) 1 0.7 1.6 Return on Assets (%) 0.6 0.7 1.6 Return on Assets (%) 0.6 -0.1 16.1 Debt/Eq uity (%) 233.3 13.1 163. 7 Debt/Eq uity (%) 377 13.1 163.7 Assets/Li ab (%) 1.1 1 3.7 LLR/NPL (%) 293.5 122 1379 .4 LLR/NPL (%) 13.1 122 1379. 4 Debt/Ass et (%) 17.7 0.6 77.5 Tier 1 Capital Ratio (%) 14.8 10.2 17.2 Tier 1 Capital Ratio (%) 14 10.2 17.2 Debt/Eq uity (%) 176.3 1.7 644.8 Assets/Li ab (%) 1.1 1.1 1.2 Assets/Li ab (%) 1.1 1.1 1.2 Liquidity Assessment Liquidity Metric Scena rio 1 Baseli ne Scena rio 2 Liquidity Metric Scena rio 1 Baseli ne Scen ari 2 Liquidity Metric Scena rio 1 Baseli ne Scena rio 2 Mid- Price (BVAL) 97.42 Mid- Price (BVAL) 90.03 Mid- Price (BVAL 90.03 Exit Price 97.38 97.39 97.4 Exit Price 89.93 89.96 89.9 8 Exit Price 89.96 89.96 89.98 Liquidati on Cost (bps) 3.90 2.70 2.00 Liquidati on Cost (bps) 10 7.2 5.50 Liquidati on Cost (bps) 7.2 7.20 5.5 Liquidati on Horizon (days 0.3 0.2 0.2 Liquidati on Horizon (days 0.4 0.3 0.3 0.3 0.3 0.3 0.30 Time to Cash (days) 3 3 3 Time to Cash (days) 3 3 3 Time to Cash (days) 3 3 3
  • 4. SEC 22E4 Classifica tion Highl y Liquid Highl y Liqui d Highl y Liquid SEC 22E4 Classifica tion Highl y Liquid Highl y Liqui d Highl y Liqui d SEC 22E4 Classifica tion Highl y Liquid Highl y Liqui d Highl y Liquid AIFMD Classifica tion 2 to 7 days 2 to 7 days 2 to 7 days AIFMD Classifica tion 2 to 7 days 2 to 7 days 2 to 7 days AIFMD Classifica tion 2 to 7 days 2 to 7 days 2 to 7 days Data Source: Bloomberg Notes: Scenario 1 - Assumes expected daily volume of 0.5x of baseline. Scenario 2 - Assumes expected daily volume of 2.0x of baseline. The 10th and 90th percentile represent the sector figures. The liquidity assessment considers an investment of $1 million. Appendix Bond Rating Scale:
  • 5. Source: Moody’s, S&P and Fitch. Terminologies: Investment Grade signifies that the bonds relatively have a lower risk of default and receive higher ratings by the credit rating agencies. Yield to Maturity: The total return anticipated on a bond if the bond is held until it matures.
  • 6. LQA: A liquidity estimation. A higher number indicates lower bid-ask spreads. ISIN: A 12-digit alphanumeric code that uniquely identifies a specific security. Risks and Assumptions for Back-tested trading strategies The risks and assumptions listed here are not intended to be an exhaustive summary of all the risks and assumptions involved. The strategy might suffer from look-ahead bias which occurs due to the use of information or data in a study or simulation that would not have been known or available during the period being analyzed. This can lead to inaccurate results in the study or simulation. Future price movements may not be exactly the same as the historical price movements and this could lead to variation in performance. Testing can sometimes lead to over-optimization. This is a condition where performance results are tuned so high to the past they are no longer as accurate in the future.
  • 7. The model assumes no slippages in trading. Slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed. Drawdowns in actual trading can be higher than the tested system and losses could be significant in the event of leverage. Unforeseen events can lead to variation in performance from the tested trading strategy. The tested result has been computed with price feeds available from Bloomberg. The testing environment has not considered transaction or any other costs. Trading indicators used for the purpose of testing has been provided by Bloomberg. The strategy might suffer from data mining fallacy, selection bias and backfill bias.
  • 8. Data Source: Bloomberg Data: 17/02/2023 Arun Leslie John Chief Market Analyst Disclaimer: Century Financial Consultancy LLC (“CFC”) is Limited Liability Company incorporated under the Laws of UAE and is duly licensed and regulated by the Emirates Securities and Commodities Authority of UAE (SCA).This document is a marketing material and is for informational purposes only and must not be construed to be an advice to invest or otherwise in any investment or financial product. CFC does not guarantee as to adequacy, accuracy, completeness or reliability of any information or data contained herein and under no circumstances whatsoever none of such information or data be construed as an advice or trading strategy or recommendation to deal (Buy/Sell) in any investment or financial product. CFC is not responsible or liable for any result, gain or loss, based on this information, in whole or in part. Please carefully read disclaimer mentioned below/next page/next frame. PLEASE READ THE FOLLOWING TERMS AND CONDITIONS OF ACCESS FOR THE PUBLICATION BEFORE THE USE THEREOF. By use of the publication and continuing to access the publication, you accept these terms and conditions and undertake to be bound by the acceptance. CFC reserves the right to amend, remove, or add to the publication and Disclaimer at any time without any prior notice to you. Such modifications may be effective immediately or otherwise. Accordingly, please continue to review this Disclaimer whenever accessing, or using the publication. Your access of, and use of the publication, after modifications to the Disclaimer will constitute your acceptance of the terms and conditions of use of the publication, as modified. If, at any time, you do not wish to accept the content of this Disclaimer, you may not access, or use the publication. Any terms and conditions proposed by you which are in addition to or which conflict with this Disclaimer are expressly rejected by CFC and shall be of no force or effect. No information as given herein by CFC in this publication should be construed as an offer, recommendation or solicitation to purchase or dispose of any securities/financial instruments/products or to enter in any transaction or adopt any hedging, trading or investment strategy. The data/information contained in the publication is not designed to initiate or conclude any transaction. Neither this publication nor anything contained herein shall form the basis of any contract or commitment whatsoever. Distribution of this publication does not oblige CFC to enter into any transaction. The information in this document is not intended, by itself, to constitute independent, impartial or objective research or a recommendation from CFC and should not be treated as such. The content of this publication should not be considered legal, regulatory, credit, tax or accounting advice. Anyone proposing to rely on or use the information contained in the publication should independently verify and check the accuracy, completeness, reliability and suitability of the information and should obtain independent and specific advice from appropriate professionals or experts regarding information contained in this publication. CFC cannot be held responsible for the impact of any transactional costs or any taxes as may be applicable on transactions. Information contained herein is based on various sources, including but not limited to public information, annual reports and statistical data that CFC considers reliable. However, CFC makes no representation or warranty as to the accuracy or completeness of any report or statistical data made
  • 9. in or in connection with this publication and accepts no responsibility whatsoever for any loss or damage caused by any act or omission taken as a result of the information contained in this publication. References to any financial instrument or investment product does not imply that an actual trading market exists for such instrument or product. In publishing this document CFC is not acting in the capacity of a fiduciary or financial advisor. The report does not take into account the investment objectives, financial situations and specific needs of recipients. The recipient of this publication must make its own independent decisions regarding whether this communication and any securities or financial instruments mentioned herein, is appropriate in the light of its investment objectives, investment experience, financial situation, existing portfolio holdings and/or investment needs. Recipients will need to decide on their own as to whether or not the contents of this document are suitable for them. This document is a marketing material and has been prepared by individual(s), marketing and/or research personnel of CFC. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is purely a marketing communication. In this publication, any opinions, news, research, analysis, prices, or other information constitute is a general market commentary, and do not constitute the opinion or advice of CFC or any form of personal or investment advice. CFC neither endorses nor guarantees offerings of third party, nor is CFC responsible for the content, veracity or opinions of third-party speakers, presenters, participants or providers. CFC will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Charts, graphs and related data or information provided in this publication are intended to serve for illustrative purposes only. The information contained in this publication is prepared as of a particular date and time and will not reflect subsequent changes in the market or changes in any other factors relevant to their determination. All statements as to future matters are not guaranteed to be accurate. CFC expressly disclaims any obligation to update or revise any forward-looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events. The information in this communication cannot disclose everything about the nature and risks of the abovementioned data / information. This is not an exhaustive list of the risks involved, nor should it be regarded as offering advice on the suitability of these investments for the recipient. All views expressed in all reports, analysis and documents are subject to change without notice. CFC may have issued other reports, analysis or other documents expressing different views from the contents hereof. Staff members/employees of CFC may provide/present oral or written market commentary or analysis to you that reflect opinions that are contrary to the opinions expressed in this research and may contain insights and reports that are inconsistent with the views expressed in this publication. Neither CFC nor any of its affiliates, group companies, directors, employees, agents or representatives assume any liability nor shall they be made liable for any damages whether direct, indirect, special or consequential including loss of revenue or profits that may arise from or in connection with the use of the information provided in this publication. Information or data provided by means in this publication may have many inherent limitations, like module errors or lack accuracy in its historical data. Data included in the publication may rely on models that do not reflect or take into account all potentially significant factors such as market risk, liquidity risk, credit risk etc.
  • 10. CFC and its affiliates reserve the right to act upon or use the contents hereof at any time, including before its publication herein. The use of our information, products and services should be on your own due diligence and you agree that CFC is not liable for any failure to achieve desired return on investment that is in any manner related to availing of services or products of CFC and use of our information, products and services. You acknowledge and agree that past investment performance is not indicative of the future performance results of any investment and that the information contained herein is not to be used as an indication for the future performance of any investment activity. Any prices provided in this document are indicative only and do not represent firm quotes as to either price or size. The value of any investment or income may go down as well as up. All investments involve an element of risk, including capital loss. This publication is being furnished to you solely for your information and neither it nor any part of it may be used, forwarded, disclosed, distributed or delivered to anyone else. You may not copy, reproduce, display, modify or create derivative works from any data or information contained in this publication. This document may not be published, circulated, reproduced, or distributed in whole or part to any other person (whether within or in a jurisdiction outside UAE) without the prior written consent of CFC. Declaration of the Financial Analyst The analyst(s) who prepared this report certifies that the opinions contained herein accurately and exclusively reflect his or her views. The Analyst further undertakes that he or she has taken reasonable care to maintain independence and objectivity in respect of the opinions herein. The analyst(s) who wrote this report does not hold securities in the Company mentioned in the report. The analyst(s) receives a fixed compensation from CFC. No part of his or her compensation was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this report. The business solicitation or marketing departments of CFC are separate and independent from the reporting line of the analyst(s). The analyst(s) confirms that he or she and his / her associates do not serve as directors or officers of the Company, and the Company or other third parties have not provided or agreed to provide any compensation or other benefits to the analyst(s) in connection with this report. An “associate” is defined as the spouse, parent or step-parent, or any minor child (natural or adopted) or minor step-child, of the analyst. Services offered by CFC include products that are traded on margin and can result in losses that exceed deposits. Before deciding to trade on margin products, you should consider your investment objectives, risk tolerance and your level of experience on these products. Trading with leverage carries significant risk of losses and as such margin products are not suitable for every investor and you should ensure that you understand the risks involved and should seek independent advice from professionals or experts if necessary.